Meaning "forbearance, sufferance" is from 1580s. The specific religious sense is from 1609; as in Act of Toleration (1689), statute granting freedom of religious worship (with conditions) to dissenting Protestants in England. In this it means "recognition of the right of private judgment in matters of faith and worship; liberty granted by the government to preach and worship as one pleases; equality under the law without regard to religion."

If any man err from the right way, it is his own misfortune, no injury to thee; nor therefore art thou to punish him in the things of this life because thou supposest he will be miserable in that which is to come. Nobody, therefore, in fine, neither single persons nor churches, nay, nor even commonwealths, have any just title to invade the civil rights and worldly goods of each other upon pretence of religion. [John Locke, "Letter Concerning Toleration," 1689]

Before any man can be considered as a member of Civil Society, he must be considered as a subject of the Governour of the Universe: And if a member of Civil Society, do it with a saving of his allegiance to the Universal Sovereign. We maintain therefore that in matters of Religion, no man's right is abridged by the institution of Civil Society and that Religion is wholly exempt from its cognizance. [James Madison, "Memorial and Remonstrance Against Religious Assessments," 1785]

Unlimited tolerance must lead to the disappearance of tolerance. If we extend unlimited tolerance even to those who are intolerant, if we are not prepared to defend a tolerant society against the onslaught of the intolerant, then the tolerant will be destroyed, and tolerance with them. [Karl Popper, "The Open Society and Its Enemies," 1962]